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Itr 3 - wrong capital balance amount

Molly (Others) (115 Points)

05 July 2014

Hi everyone

I just filed my returns yesterday and sent the form to CPC however I just noticed that the loss of the company had not been transfered to the capital account of partners and my capital balance is reduced by 13000. Overall I do not fall in the tax bracket and paid no tax but filed my returns. Please can someone let me know what needs to be done? Should I file a revised version again and change the amount of capital balance or is this not a big issue? Please help :(

Please can any expert or accountant help me on this as many are viewing my thread but no one is saying anything.

Many thanks

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8 Replies

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 05 July 2014

few ques. before i reply... is it a co. or a firm???? without transferring loss to capital a/c how could your capital get reduced,???

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Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 05 July 2014

in case of firms, loss is not transfered to partner's capital a/c for i.t. purposes. only profits are shared and reported in itr-3 not the losses. losses need to be carried forward by the firm for set off in subsequent years.

(Guest)

From accounting point of view you required to transfer Firm loss to partner capital account as per their sharing ratio. Therefore, in ITR -3 required to be revised.

if you are honest about this error then there is no issue in future as you have proper answer to AO..

and AO will come to this from cross checking with Firms' income tax return capital figures.

Molly (Others) (115 Points)
Replied 07 July 2014

Hi and thank you all who have replied.

Mr. Tribhuvan Aditya Singh - This is a company and the accountant had not passed the entry of transfering loss to the partners. I noticed it only after sending my form much later.

Mr. GANESHAN - Acc to your statement I should file a revised return correct as the AO will double check with the firm? Please confirm and I shall then proceed towards filing revised return.

Thank you very much!

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 07 July 2014

@ molly.... a co. can only have directors, members or shareholders. whereas a partnership firm or LLP have partners. ..... this is why i had asked this ques. but your answer is still not satisfactory for me.

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Molly (Others) (115 Points)
Replied 07 July 2014

Hello Mr. Tribhuvan, really sorry but I was not aware of the difference..the company has PVT Limited at the end so I thought it is a company instead of a firm. There are no shareholders, directors or members and only partners.

(Guest)

Kindly post your doubt again with proper interpretation.

Then we will able to provide you proper opinion.

Thx

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 07 July 2014

@ molly... if it has PVT LTD at the end then obviously it is a company and a company cannot have partners. so you must confirm on this from your CA...... from your ques. and facts before me till now... i can only interprete that you are one of the co-owners of the so called co. and were not reqd to file itr-3. because this itr is filed by partners of a firm which is not in your case...... in case you need more help, then first provide me name of your co. and its pan so that i can myself decide if it is co. or firm.